Emerging Trends in Utility Green Power Products. October 28, 2015

Transcription

1 Emerging Trends in Utility Green Power Products October 28, 2015

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3 Speakers Moderator Lise Trudeau Sr. Engineering Specialist, Renewable Energy and Advanced Technologies Minnesota Department of Commerce, Division of Energy Resources Voluntary Green Power Programs in 2015 and Beyond Adam Capage Vice President, Utility Partnerships 3Degrees Emerging Trends in Green Tariffs Letha Tawney Director of Utility Innovation and Polsky Chair for Renewable Energy World Resources Institute

4 Context e21 initiative Phase I report, December 2014 Recommendations included development of innovative utility service offerings to meet market demand. MN 2025 Energy Action Plan, Green tariffs highlighted for potential to facilitate transition to clean energy. Meister Consultants for AEE, October 2015 Analysis highlights MN policy potential for green tariffs. Estimated 8,900 MW of new renewable capacity to meet large corporate energy load.

5 Context Electric vehicle charging tariffs: December 2015: Investor owned utilities to file framework for an all-renewable rate option for electric vehicle charging PUC Docket numbers: , ,

6 Speakers Voluntary Green Power Programs in 2015 and Beyond Adam Capage Vice President, Utility Partnerships 3Degrees

7 VOLUNTARY GREEN POWER PROGRAMS IN 2015 AND BEYOND PRESENTED TO Webinar Emerging Trends in Utility Green Power Products

8 Market overview Different structures Why utilities? Best practices

9 Market Overview

10 01 MARKET OVERVIEW REC PRIMER A Quick REC Primer GREEN POWER MARKETER

11 01 MARKET OVERVIEW VOLUNTARY MARKET INTRO Full Market Overview Voluntary Market Onsite Solar & Other Utility Programs Corporate Purchasing Competitive Markets

12 Today s Market Realities 01 MARKET OVERVIEW CURRENT DRIVERS REC BASED PROGRAMS + Handful of very successful programs + Many programs just maintain basic performance + Mature programs struggle to outpace churn to find program growth + Not a lot of new programs starting SOLAR MARKET + Rapidly changing market place + Utility concerns about net metering and Value-of- Solar Tariffs (VOSTs) + Desire from multiple parties to expand access to solar + Customer demand across all segments

13 Different Structures

14 02 DIFFERENT STRUCTURES COMMERCIAL PURCHASES How Commercial Purchases are Getting Done TARIFFED PRODUCT + Through the same program available to residential customers + Bulk rate options + Hybrid deals ONE-OFF DEALS + One-off deal negotiation + National REC tariffs + Self-allocation of existing state surcharges

15 02 DIFFERENT STRUCTURES CASE STUDY Pacific Power s Blue Sky program Case Study SMALL MEDIUM SIZED BUSINESS CUSTOMERS + Same product options as residential customers + Green-e Energy certified + Blend of local, newer wind, biomass, geothermal and solar + Suite of marketing / recognition benefits LARGE BUSINESSES CUSTOMERS + Western Region wind sold in 100-kWh blocks for $1.95 each + Bulk rate pricing price per block decreases with each block over Hybrid deals partners with a REC vendor to blend a percentage of Blue Sky blocks with lower priced RECs + Oregon Self-allocate public purpose charges of 3% to Blue Sky program + One-off deals Similar to a hybrid deal but 100% of the enrollment counts towards program MWh sales + Green-e Energy certified + Suite of marketing / recognition benefits

16 02 DIFFERENT STRUCTURES CASE STUDY Austin Energy s GreenChoice Case Study STRUCTURE + 100% Texas Wind, secured through long-term supply contracts + GreenChoice charge replaces traditional energy charge + Green-e Energy certified MARKETING + Target commercial customers from the beginning + Key Account Managers sell GreenChoice to their customers through existing relationships BENEFITS + Stable Price + Large purchasers also qualify for EPA Green Power Partner Program, City of Austin s Green Business Leaders, LEED credits, and Austin Energy Green Building ratings

17 Why Utilities?

18 03 WHY UTILITIES OVERVIEW Why business customers choose utilities + Existing relationship + Flexible pricing tiers + No contracts to sign + No RFP process + Marketing / recognition benefits

19 03 WHY UTILITIES UTILITY PROGRAM PARTICIPANTS Sample of businesses who participate in utility programs + Tech companies - Apple, Inc; Dell, Inc + Government Agencies MN Municipal Pollution Control Agency, Metro Transit, U.S. Environmental Protection Agency, U.S. National Park Service + Aerospace - Lockheed Martin + Breweries Full Sail, Widmer Brothers, Deschutes, and many, many more + City Governments St. Paul, MN; Park City, UT; Washington D.C.; Austin, TX + Colleges & Universities University of St. Thomas, Bemidji State University, University of Wyoming, University of Wisconsin, Santa Clara University

20 Best Practices

21 Best Practices 04 BEST PRACTICES PROGRAM DESIGN PROGRAM SPECIFIC + Supply + Retire the REC + Newer projects, local, longer term contracts (all solar or wind) + Invest in marketing + Become Green-e Energy certified + Set smart pricing BUSINESS CUSTOMER SPECIFIC + Minimize barriers + Offer monthly pricing with flexibility to pay annually + Simplify participation tiers (small med purchasers) + Align participation tiers with EPA recognition (large purchasers) + Appeal to larger purchasers + Establish attractive marketing benefits

22 04 BEST PRACTICES MARKETING TACTICS Marketing Tactics HIGH TOUCH, SERVICE CENTERED TACTICS + Courtesy Knock + Call Center / Courtesy Calls

23 04 BEST PRACTICES MARKETING BENEFITS Marketing/recognition benefits MOBILE COUPONS SOCIAL MEDIA ADVERTISING

24 04 BEST PRACTICES RESOURCES More resources + NREL top ten list: + NREL State of Voluntary Market report: + EPA Green Power Partnership:

25 Contact ADAM CAPAGE Vice President of Utility Partnerships (503)

26 Speakers Emerging Trends in Green Tariffs Letha Tawney Director of Utility Innovation and Polsky Chair for Renewable Energy World Resources Institute

27 EMERGING TRENDS IN GREEN TARIFFS Letha Tawney, Director Utility Innovation October 28, 2015 MN Dept of Commerce webinar

28 WRI S ENERGY WORK We foster collaborations between utilities, large energy buyers and regulators to create opportunities for cost-effective renewable energy deployment.

29 COMPANIES ARE BUYING RENEWABLE ENERGY IN MANY WAYS TODAY Unbundled RECs Green Power Programs RECs contracts with projects Purchases from brokers Energy + RECs Rooftop or Community Solar Green Tariffs PPAs via Direct Access Contracts for Differences / Virtual PPAs Direct project investment

30 CORPORATE LARGE-SCALE PPA MARKET Source: BNEF, RMI Analysis Source: BNEF w/ RMI

31

32 CORPORATE RE BUYERS PRINCIPLES

33 EMERGENCE OF GREEN TARIFFS States without electricity retail choice States with electricity retail choice States with green tariff offerings (on the books or in process)

34 GREEN TARIFFS: THE IDEA Energy + RECs Fixed / predictable price for energy Protection from a fuel charge May allow lower than retail rates for the energy Expanding on regulatory models such as combined heat and power or direct access

35 DESIGN STRUCTURES: HIGH-LEVEL DIFFERENCES PSE WA (proposed) RMP UT NV Energy - NV Duke NC Tariff type New tariff New tariff Rider Rider Contract Terms Energy demand Power demand Costcompetitive w/retail rates Possible Contract length 10 years; can extend to 15 years Flexibility Possible ROI for utility Yes (across facilities) Possible even a discount Negotiated Yes (across facilities) Energy demand Possible Negotiated; min 2 years Yes (in trans. design) Yes Yes Yes No RE deals N/A Apple, Switch in talks Energy demand Always premium Negotiated; 3 15 years

36 EMERGING LESSONS Helpful - simplicity and the ability to hedge against retail rates, as CHP does Problem significant premium or complexity Problem capacity limitations prevent 100% RE goal

37 WHAT MAKES GREEN TARIFFS ATTRACTIVE TO CUSTOMERS? Price predictability (Potentially) lower project and energy costs Reliable counter-party in the utility Preserved capital Flexibility - move locations unlike on-site generation Additionality pointing to a specific project

38 WHAT MAKES GREEN TARIFFS ATTRACTIVE TO UTILITIES? Predictable load in an era of rapid change Predictable revenue and return unlike RECs only products Strong customer relationships Opportunity to plan for siting and integration optimize Opportunity to value the lower carbon route to compliance

39 HOW TO PROTECT OTHER CUSTOMERS Separate the energy portion of the bill from the grid and other services Customer pays the cost of the energy used extra production is priced at market Explicitly charge for shaping Penalties for early termination Soft-limit the program size to otherwise anticipated resource additions and 100% of customer demand

40 Further Reading Letha Tawney Director Utility Innovation World Resources Institute

41 Questions? Submit questions via the Questions field in the webinar control panel. mn.gov/commerce/energy